US dollar net longs fall to five-week low

By

Reuters

PublishedSaturday, April 08, 2017

Speculators further reduced bullish bets on the U.S. dollar, pushing net longs to their lowest level since late February, according to Commodity Futures Trading Commission data released on Friday and calculations by Reuters.

The value of the dollar's net long position totaled $14.67 billion in the week ended April 4, down from $15.27 billion the previous week. Investors have reduced long dollar bets for a second straight week and Friday's net long dollar positioning was a five-week low.

It has been an uncertain few weeks for the U.S. dollar, starting when President Donald Trump's fellow Republicans pulled their bill to overhaul the U.S. healthcare system due to a shortage of votes.

Investors were concerned that after the healthcare turmoil, the Trump administration would not be able pass the tax reforms that analysts believe would have a significant impact on the economy.

"The Trump administration has struggled to recapture the optimism of the post-election victory when the pro-growth policies were announced, and so far has not delivered," said Alfonso Esparza, senior currency analyst at OANDA in Toronto. That has weighed on the dollar.

The healthcare debacle in Washington was followed by the Federal Reserve minutes of last month's monetary policy meeting which showed an internal debate on inflation and growth that has raised doubts about the Fed's pace of monetary tightening.

Investors still see two more interest rate rises this year, a far cry from the four hikes being priced in at the beginning of the year.

Capping a turbulent week for the dollar were the U.S. air strikes on Syria and a U.S. nonfarm payrolls report that badly missed expectations.

"Expect the market to remain very nervous after Trump's missile attack on Syria, with fundamentals taking a back seat while investor anxiety remains high," said Esparza

Net shorts on the Japanese yen, meanwhile, fell to 45,800 contracts, the smallest since December.

The Reuters calculation for the aggregate U.S. dollar position is derived from net positions of International Monetary Market speculators in the yen, euro, British pound, Swiss franc and Canadian and Australian dollars.